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ObamaCare Exchanges: 7 Things You Need To Know

Here it comes, ready or not, enrollment in the ObamaCare Affordable Healthcare Exchanges has begun as of October 1. You are required to sign up for a plan by March 31, 2014 if you don't get your insurance from your employer, Medicare, or Medicaid.

How will I buy insurance through an exchange?

Each state, and the District of Columbia, will have a health insurance exchange online. Individual consumers will be able to go online and compare various insurance policies, pick a plan, and enroll.

Some states, like New York and California, will run their own exchanges, with insurance companies offering dozens of qualified plans, each with varying costs. Others, like Florida and Texas, will be run by the federal government. Still others, such as Illinois and Michigan, are partnering with the federal government to run their marketplaces.

For information on what your home state is doing, to find your exchange, and enroll if the federal government is handling the program in your state, you can log onto the federal government Website: HealthCare.gov and follow the prompts

What happens if you don't enroll in a health plan by the deadline ?

You will be required to pay a tax penalty next year to the IRS:

$95 per individual (or 1 percent of your income, whichever is greater), $285 per family.$325 per individual (or 2 percent of income), $975 per family in 2015.$695 per individual (or 2.5 percent of income) and $2,085 per family in 2016 and beyond.

After March 31, you can only apply for insurance if you experience a major life change, such as job loss, divorce, or birth in your family. The next open enrollment period (for 2015) will begin Oct. 15, 2014.

What if I don't have a computer? Toll-free call centers will be available, with trained experts, to detail your options and enroll you in health coverage.

For information, call 1-800-319-2596. The line is open 24 hours a day, seven days a week.

How can I find out if I qualify for a subsidy?About 26 million Americans may be eligible for federal tax subsidies to help defray the cost of their insurance premium. Only qualified individuals who sign up for insurance through the exchanges will be able to receive the subsidies, which take effect next year.

If you earn less than 400 percent of the poverty level — about $46,000 for an individual; $90,000 for a family of four— you may qualify for a subsidies. In example:

A family of four on the high end of the scale — with an annual household income of $88,200 — will pay a maximum of 9.5, which amounts to $8,379 per year for a health insurance premium, and the rest would be subsidized

On the bottom end of the scale, a family of four with an income of $29,327 will only have to pay 2 percent of household income — or $587 per year for the same plan that will cost the higher-income family $8,379.

Low income residents in about half the states that plan to expand Medicaid under Obamacare will also qualify for free or low-cost healthcare through the federal program for the poor. Applicants earning up to 133 percent of the poverty line — just under $30,000 a year for a family of four — who log onto HealthCare.gov will be directed to Medicaid or the Children's Health Insurance Program.

What kinds of plans will be offered?

Insurers will offer four standardized plans designated as bronze, silver, gold, platinum. Each plan will cover 10 categories of essential benefits, set by the federal government, such as emergency service, prescription drug coverage, preventive care, and mental health treatment, each will vary in cost:

Bronze plans: Offer the lowest amount of coverage , 60 percent of medical costs on average , but will have the lowest premiums.

Silver: 70 percent of costs are covered.

Gold: 80 percent of costs are covered.

Platinum: 90 percent of costs are covered, but these plans will have the highest premiums.

What is the application process?

The U.S. Department of Health and Humans Services has devised a three-page application for individuals to apply online or on paper.

You will need to provide the following information:

Name and personal facts (address, Social Security number, date of birth).

Permission to give an authorized representative or “navigator” access to application information.

What about small business Owners?

Small businesses, those with fewer than 50 workers, will eventually be able to shop for coverage for their employees through the Small Business Health Options Program or SHOP, that is a part of the healthcare exchanges.

The SHOP exchanges pool small employers together so they bargain with insurance coverage as a group. But there are some problems with the rollout of the SHOP exchanges.

Federal officials announced that small businesses will not be able to enroll directly on Oct. 1, as planned, unless they work through an insurance agent. Officials expect the exchanges will be open to small businesses by Nov. 1.

The Obama administration recently said it is delaying the full implementation of the SHOP program. In most states where federal officials are running the exchanges or operating them in partnership with the states, small businesses will not be able to provide workers with a choice of health plans as the law intended until 2015.